Projects To Rehabilitate Infrastructures Await Government’s Approval

A half billion dollar loan from foreign banks and projects has been tabled for approval from the Parliament. The loan is intended for five infrastructure rehabilitation projects.

The projects focus on upgrading electricity and transportation facilities in the Amhara regional state and Addis Abeba.

The largest loan will go to the Addis Abeba High Voltage Network Rehabilitation and Upgrading Project, which aims to address the problem of electrical shortages in the industrial sector, and includes the installation of 23kV electrical wires and upgrading and building power stations. The overall cost for this project is estimated to be about 270 million dollars. The China Export-Import Bank will cover 85 pc of the budget. The loan will be paid over 20 years with a seven-year grace period.

The second highest amount of money will go to a road project in Addis Abeba which extends from Qality to Tulu Dimto and Qality to Qilinto and is expected to help ease traffic congestion. The total cost of the project amounted 178 million, 89 million dollar of which will be covered by the loan. The project agreement was signed between the Ethiopian Government and the Chinese Export-Import Bank a month ago. The loan is to be paid in 20 years with a five-year grace period. Another road project extending from the Pushkin ring road to Gotera Masalacha and covering 2.3 km will take 50 million dollars of the loan. It was signed between the Ethiopia and Chinese governments on six different occasions.

A road project in Hamusit Este Wereda, in Amhara region will receive the smallest allocation from the loan. The road connects five cities in Amhara state and includes the construction of drainage systems, and laying gravel and asphalt.

“We are going to tender for the construction company that will build this asphalt roads, ” Said Samson Wondimu, communication director at Ethiopian Roads Authority.

It will cost 44 million dollars overall, of which nine million will be covered by the Ethiopian Government. The rest will be funded by a loan from the Arab Bank and the OPEC Fund. The loan will mature in 30 years, with a 10 year grace period.

Apart from road construction, a 41 million dollar project to construct a National Load Dispatch Centre to increase electric power capacity has been tabled before Parliament. The loan was provided by the French Development Agency (AFD). The loan will be paid back within 20 years with a grace period of five years. The Ethiopian Electric Power is currently preparing bid documents and selecting sites for the construction.

Even though AFD has fully funded the project, the government will remove all taxes on machinery and equipment imported for the construction of the centre.

Another project that will benefit from the proposed loans is the Addis Abeba Bus Rapid Transit Project which will receive a 37 million dollar loan which will be paid within 25 years without a grace period. Addis Abeba’s Bus Rapid Transit (BRT) project has received 95 million dollars financing from Agencé France de Development (AfD) in the past two years for the construction of this road. The upcoming construction is in order to upgrade the gravel into an asphalt. The rest of the proposed loans – 18 million dollars – will go towards the Addis Abeba City Administration effort to ease the transportation problem in the city. Ethiopia’s external debt stocks grew at an average annual rate of 20.8pc during the first edition of Growth and Transformation Plan while until March 2016, the country’s public debt as a percentage of GDP stood at 55pc


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